Recent Researches in Environment, Energy Systems and Sustainability
Ternate-Tidore Spice Islands: A Territory Branding Process
ZULAIKHA BUDI ASTUTI1, RUI A. R. RAMOS2 Department of Civil Engineering University of Minho – Engineering School Campus de Gualtar – 4710-057 Braga, PORTUGAL (1) [email protected], (2) [email protected], www.civil.uminho.pt/c-tac/
Abstract: - Territory branding strategies have recently been adopted to intensify urban competition for resources, markets, opportunities and attention. This paper examines the new strategy for territory management through branding for a low GDP territory but with remarkable natural resources. Applying the “critical city” approach, analysis through diagnosis will be started by SWOT tools to define vision and mission. Then priority and drivers are formulated to be achieved in the future. Branding, placement and benchmarking are considered as the marketing process which will be followed by strategy implementation in some projects as actions. From the results, the strong territory branding based on its identity can be formulated.
Key-Words: - territory branding, critical city, SWOT analysis, North Maluku, Indonesia.
1 Introduction with corporate branding as an effort to grapple with Branding the territory is a new trend in urban the development of an understanding of cities and strategy, mostly applied to stimulate economic their brands [1]. Mainly created to stimulate growth. There are several ways to perform a economic growth, according to CEOs for cities [2, branding process. One of them is the critical city 3], a strong brand can shift the perception of a place approach proposed by “innovpoint”, a Portuguese that may be suffering from a poor image among consulting company. In this process, several external and internal constituents, create a common approaches are analyzed to produce strong strategic vision for the future of the community and its plans. Afterwards, precise projects and actions will potential, provide a consistent representation of the be recommended for its accomplishment. The place, enhance its local, regional and global branding process components allow the territory to awareness and position, and shed unfavorable build a monitoring and evaluation system. stereotypes associated with a place, making it more “Spice Islands” is a phrase that is associated with appealing. spices producer territories. One of them is North Dinnie (2004), mentioned in Hanna and Rowley Maluku Islands, Indonesia. Almost 57% of its [4], has already postulated that territory branding economic backbone is from agriculture, especially has the ability to transcend and confine a single in spices. However, unclear territory policy brought industry to achieve a more cohesive image. North Maluku into static economic growth by Empirical studies of Zerillo and Thomas [5], One running out of natural resources. Spices are the Territory One Product (OTOP) in Thailand and everlasting most valuable commodity in the world palm oil businesses in the Philippines are some of markedly by its high price, supposedly to help the territory branding success stories which looked people’s welfare; however, that is not the case. In for an opportunity to brand their unique capability to order to help this territory to have a new planning add value. In the end, these examples show that the point of view, this paper will address and analyze programs have become the current government for North Maluku potentialities for its territory branding promoting entrepreneurship and creating jobs. process. The process of creating a place brand has been formulated in the Core Cities Conference in 2007 as 2 Theoretical Framework to identify visual, verbal, experiential elements of places to communicate (“what are the main things Nowadays, every place has to compete with other that you want people to know about your place?”), places for its share of the world’s consumers, and develop messages and consider how to put it tourism, business, investment, capital, respect, and across to different audiences – internal and external, attention. One of the strategies consists of city, and forge associations between place and (potential) place, and tourism branding. Answorth and consumers [6]. A brand is not just a name; logo, Kavaratzis linked this territory branding process website or brochure, a brand is something that exists
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in the collective mind of the consumer [6]. A brand and agro industry manufacturing, 13%. Even though image for a city will create or change awareness and 50% of all capital goes to agriculture, ±12% of the create or build consumer demand for a product in an inhabitants live in poverty and GDRP at Current increasingly competitive market place. Marketing Market Prices is very low: IDR 4,687 million territory does not mean producing leaflets and (2009) which put this territory in the bottom three creating websites, but it should represent an urban rank position among Indonesian provinces [9]. management philosophy being used for the fulfillment of its inherent potential [7]. The critical city approach and its core and drivers methodology from “innovation point” is one of the guidelines for a branding process (Figure 1). This methodology combines the analysis of what the territory has to offer and the drivers which want to be achieved with marketing, to map what happens outside the territory. This stage serves to answer the question what is the territory or city like from a strategic point of view and to define which direction the territory/city wants to take. After that, in order to achieve a successful future, the strategy plan should Fig. 2: North Maluku, Indonesia Archipelago be arranged, followed by projects and consistently the definition of action. This framework can also be Well known as the Spice Islands, the productivity of used as a monitoring tool, in every step in branding, clove, nutmeg, and cinnamon was established a projects, and action [8]. record value of productivity in 2009, respectively, 5,515ton/20,132ha, 4,412ton/32,287ha, and 121ton/371ha [9, 10]. Other state crops are coconut, coffee, and cacao with productivities of 220,623ton/224,502ha, 404ton/3,517ha, and 12,231ton/34,870ha, respectively [9, 10]. The highest crop number is coconut (two central producers: North Halmahera and Sula Isle), followed by cacao, clove and nutmeg as spices (Figure 3).
Fig. 1: Critical City: core and drivers methodology
3 Why North Maluku? - Diagnosis North Maluku is one of Indonesia’s Provinces, located in 3o9’ South Latitude - 2o10’North Latitude and 123o - 129o East Latitude (Figure 2). With area 145,801km2, is divided into 7 regencies and 2 municipalities (West Halmahera, Central Halmahera, North Halmahera, South Halmahera, Sula Isle, East Halmahera, Morotai, Ternate City Fig. 3: Production Area of coconut, clove and and Tidore City). In 2009, 979,990 inhabitants lived nutmeg (resumed by the authors) [10] there. Most of them work in agriculture sectors For many years, farmers have done the traditional (58% of working age populations: 231,296 persons). harvesting process. Unfortunately, the products are The economic backbone is mainly agriculture, 37%,
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under standards of Indonesia National Standard such Supported by existing infrastructures, in 2009, as: water content of nutmeg seed: 10-12%, clove: North Maluku approved several investments in 14%, and copra: 6%. Those products become so agriculture, mining, industry and manufacture. fragile when competing with other products from Some of these include: one project in estate crops Africa. For instance, when the world’s cacao price will absorb 500 employees, one project in mining was US$2.500/ton, Indonesia’s cacao price was only will absorb 115 employees, and four projects in US$2.300/ton, while Africa’s cacao price was industry and manufacture will absorb 831 US$2.700/ton [11, 12]. Farmers should be instigated employees. By the end of 2009, only agriculture and to do better after harvesting process to gain more mining projects had been implemented. In 2008, the added values. An example from an agriculture recorded number of Food Companies in North process with added value is coconut (US$292/MT): Maluku was 75 (mostly in North Halmahera & copra (US$1,117/MT), coconut fiber (US$310/MT), Ternate). Those investments give an illustration that coconut shell charcoal (US$345/MT), desiccated North Maluku is an interesting area to invest with coconut (US$2,700/MT) [13]. The low quality of agriculture as the basic sector [10]. raw material promotes more added values for the North Maluku is supported by two universities second hand of traders than for the farmers [14, 15]. and a plantation park research office (Figure 4). The long chain of trading caused North Maluku Those offices have the potentiality to improve spices to lose their value at the production level. If human resources capacity, including farmers to the farmers can produce high quality products promote strong entrepreneurship, organization and through strong marketing, the margin obtained by to produce high quality products for the agriculture North Maluku farmers and local entrepreneurs can industry. This office provides high quality seeds, be applied to increase their quality of life. applicative technology for farmers, workshops for Infrastructures are the main item for distribution knowledge transfer, empowering farmer and networking, connecting the productive area to organizations. the market places, and it has not been equally distributed. However, this province has two cities that have already been built up with complete infrastructures, such as seaport, airport, and road. Ternate and Tobelo are the gates to connect North Maluku to other places, for instance, Tobelo Seaport (regional class IV, 4 ports, length: 50-60m) is the gate to send and receive goods and people from other countries (Philippines, Japan) or other cities in Indonesia. Halmahera, as the biggest island, has already been connected with hot mix road [10]. Electricity has been installed by the Estate Electricity Company. Consisting of 150 units of generating stations to produce 66,028 MWH with low efficiency (only 50%), it supplies mostly for Fig. 4: Main Institutions and Infrastructures housing. Industry sector is supplied in a small part, (resumed by the authors) 1%. It is one of infrastructures that will be the most important component to run the agro-industry [10]. In 2012, Morotai, islands in North Maluku, will To increase the electricity capacity, the government hold an international sail event and to prepare it, this has tried to look for other forms of electricity office has already promoted a mission called “To generation, such as geothermal energy, for 7MWe in Bring North Maluku as Spice Islands as Part of North Halmahera, 15MWe in Tidore, 75MWe in Morotai Indonesian Sail 2012” [18, 19]. West Halmahera, and 140MW in South Halmahera As the diagnoses show, the main potentialities (Bacan Island) [16]. Besides converting thermal relevant for the future development of the territory energy to electricity, with applicative technology, are Agriculture, Post Harvesting Process, Trading this energy can be used directly in processes such as System, Universities, Research Centre, Human fruit and vegetables dehydration, thus supporting Resources, Infrastructures, Electricity, Geothermal agro-industry [17]. Potency, Investment Opportunities, and Events.
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4 SWOT Analysis, Vision-Mission, Core be defined in accordance with the territory vision. The next step is defining the SWOT Analysis (see For North Maluku, the driver consists of four table 1). It will help in determining the process for dimensions of success: talented, innovative, strategic plan, goal, and the decision making connected and distinctive (see Figure 5). process. Strength and Opportunity as positive aspects, combined with Weakness and Threat as negative aspects enable to establish the aligned SWOT matrix analysis. The analysis is developed to bridge internal factors and external influences, that will produce SO strategies (use strengths to take advantage of opportunities), WO strategies (take advantage of opportunities by overcoming weaknesses or making them relevant), ST strategies (use strengths to avoid threats), and WT strategies (minimise weaknesses and avoid threats). Fig. 5: Dimension of success for Ternate-Tidore, applying “city vitals” concepts [2, 3, 8] Table 1: Aligned SWOT Analysis SO Strategies WO Strategies Talent is indicated by high quality population and • Ternate-Tidore : the spice • Use of geothermal by the talented people who live there. This talent islands brand energy (direct/indirect) can respectfully fulfill the territory needs to support • Prototype project in plantation • International event to the branding process. Innovative is indicated by research (Bacan Island) get more income for first high quality products and researches. Connected • Preliminary marketing in investment international event • Empower university to refers to good-linked infrastructures and Distinctive • New technology and standards produce well skilled and is indicated by regional unique values. • Build spices factories in educated people Ternate/Tobelo 6 Marketing Process ST Strategies WT Strategies Marketing components from critical city approach • Create a good products with • Good human resources are branding, advertising, placement, and high price to invest in education • Good public services • Empower farmers and local • Good infrastructures benchmark. In order to capture the main idea of entrepreneurs organization to territory branding for North Maluku, it consists of make joint investments two parts as the main focus, which are: “Ternate- Tidore: The Spice Islands”; “Ternate-Tidore” is Strong vision will guide people’s spirit to achieve representing two important islands associated with the territory goals. Based on the diagnosis and the North Maluku and has an unique sound like a twin SWOT analyses, a vision for North Maluku is name. “The Spice Islands” serves to explain what is defined as: “the spices victory in the past will be inside the main brand which has a strong association with North Maluku as a spices producer since the the greatest spices factory in the future”. This 16th century until now. The brand will align with vision will guide people to get back on their positive this vision, as demonstrated in Figure 6. memories from the past, providing strong reasons to Advertising is one way of publicity to make reach success again in the future. Since many people people know about the new brand and to make must be involved in this sector, agriculture industry others (consumers) use it and come to the territory. can serve as a new field for jobs. Afterwards, the Some strategies are using events momentum to get core for this project is decided, choosing agriculture broader markets, introducing it to prospective as the first priority to be branded: “Core: investors to get sponsorships, such as the “Sail agriculture and agro industry (clove, nutmeg, Morotai 2012”. cinnamon, coconut, cacao)”. The next step is the placement of the project. Based on strong infrastructures that will have a good 5 Drivers connectivity, two cities are proposed to be factory Drivers can be a tool to determine what the territory placements, Ternate and Tobelo (North Halmahera). should be in the future. Drivers for city vitals are Moreover, those two cities have been chosen since one of the tools that can be applied for other they have more attractions to inward investment, territories [19]. The indicators and parameters can visitors, high skilled workers and promising students. The prototype project is proposed to be
ISBN: 978-1-61804-088-6 246 Recent Researches in Environment, Energy Systems and Sustainability
built in Bacan Island, South Halmahera, with the Plantation Park and a small research unit. This park has some facilities to do research and produces high quality products.
Fig. 7: Strategic plan scheme
Figure 6: Mascot and Slogan (Authors proposal)
A good management is one of the success key factors and should be taken seriously by the local government. Empowering farmers and local entrepreneurs organization through sharing knowledge and benchmarking to create successful companies is an important strategy to improve human resources quality. A good example is CATA Gourmet, Spanish brand
ISBN: 978-1-61804-088-6 247 Recent Researches in Environment, Energy Systems and Sustainability
low quality products. To stimulate economic [3] CEOs for Cities, Branding Your Cities, growth, in term of urban planning, brand strategy is http://www.globalchicago.org, 2006. an innovative way to drive territory development. [4] Hanna, S. And Rowley, J., An Analysis of By applying “Critical City: Core & Drivers Terminology Use in Place Branding, Place Methodology”, North Maluku can be formulated as Branding and Public Diplomacy, Vol. 4, 1, p. a territory brand. Vision: “The spices victory” in the 61-75, 2008. past will be “the greatest factory” in the future. [5] Zerillo C. P. and Thomas, G. M., Developing Brand: “Ternate-Tidore: The Spice Islands”. Brands and Emerging Markets: An Empirical Respected Impacts: developed agriculture Application, Place Branding and Public investment & management by local farmers and Diplomacy, Vol. 3, 1, p. 86-99, 2007. developed agro-industry investment and [6] Unsworth R., Re-branding the city: changing management by local entrepreneurs, good public the image of places and spaces, School of services by local government, supported Geography Faculty of Environment, University infrastructures for people living and industry, of Leeds, Leeds, 2009. natural and cultural events, strong brand and image. [7] Seisdedos G., State of The Art of City The branding will push the territory to be stronger in Marketing In European Cities, 42nd IsoCaRP its economy (for the first time) by consistently Congres, 2006. performing actions. [8] Ramos, Rui Strategic Framework, Innovation in City Management Course, University of Table 2: Actions for Ternate-Tidore brand Minho, Braga, 2011. Actions 2011 2012 2017 2020 [9] North Maluku Statistic Office, North Maluku Export Number November 2010, Ternate, 2010. Good governance supported by *** *** good human resources (1) [10] North Maluku Statistic Office, Maluku Utara in Figures 2010, Ternate, 2010. Good infrastructures (2) *** *** [11] NRM, Indonesia Efforts to be A Great Cacao Plantation & small industry *** *** Producer, http://bataviase.co.id/node/453580, prototype (Bacan) (@) 2010. Sample product for primary *** *** [12] USAID, Indonesia Cocoa Bean Value Chain marketing Case Study, Micro Report 65, 2006. New products & patent *** *** *** *** [13] Asian Pacific Coconut Community, Prices of Empowering farmers & local Other Coconut Products, 2011 *** *** *** *** entrepreneur organizations (3) [14] Indonesia Trading Ministry, Indonesia Cacao Export Opportunity to European Country, Harvesting management *** *** *** *** Report, Jakarta. http://www.indonesianmission- Transfer knowledge from *** *** *** *** eu.org, 2005. successful entrepreneurs [15] Indonesian Trade Promotion Centre, Spices High standard quality products *** *** *** *** Products Market Brief to Germany, Indonesian Spices factories(1,2,3,+@) *** *** *** Ministry of Trade, Report, Hamburg, 2010
[16] National Geothermal Collaborative, Strong market *** *** Geothermal Direct Use, ***: perform actions http://www.geocollaborative.org, 2005. Acknowledgements: The authors acknowledge [17] Hasan A., Research of Geothermal Direct Use C-TAC - Centre for Territory, Environment and for Cacao Drying, Indonesia Science and Construction, a R&D unit of University of Minho, Technology Journal, Vol. 10 no. 3 Dec. 2008, and FCT - Fundação para a Ciência e a Tecnologia, p.135-141. for the support. [18] North Maluku Assessment Institute of Agricultural Technology, Policy Analysis of References: Farming Development, Indonesian Ministry of Agriculture, www.malut.litbang.go.id, 2011 [1] Answorth G.J., and Kavaratzis M., Beyond the Logo: Brand Management for Cities, Journal [19] Poor Farmers Income Improvement through of Brand Management, Vol. 16, 8, p. 520-31, Innovation Project, Post Harvesting Treatment, 2009. Farming Website, Indonesia Agriculture Ministry, http://portalagribisnis.deptan.go.id, [2] Cortright, J, City Vitals. Chicago, CEOs for Cities, 2006. 2011.
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